EFFECT OF LIABILITY MANAGEMENT ON PERFORMANCE OF COOPERATIVE SOCIETIES IN OSUN STATE, NIGERIA.

ABSTRACT Cooperative society has been recognized as an important economic role player whose impact has been positively felt in lives of many people in the country as its objective is to promote the economic interests and general welfare of its members which leads to economy growth. However, this role has not been easy as most members of cooperative society on loan do abandon savings when repaying loan which reduce the ordinary saving contributed by members and as well reduce available funds for credit. Some also default in loan repayment which make it difficult for cooperative society to grant loan to qualified member(s) due to insufficient funds. The study therefore, examined the effect of liability management on financial performance of cooperative societies in Osun State, Nigeria. The specific objectives of the study are to examine the effect of liability management measured by share capital, ordinary savings and reserves on financial performance measured by total credit of cooperative societies in Osun State. The study is envisaged to broaden public knowledge on liability management and performance of cooperative societies as well as given required information for policy maker and cooperative societies management for better running of cooperative societies in the country. The research adopted causal research design and secondary data method of data collection was used to obtain panel data from Osogbo Oroki Cooperative Investment and Credit Union Limited Statistical Returns of Affiliated Societies from 2009 to 2022. Panel regression analysis was used to analyze the data collected. The study reveals that ordinary savings and share capital have positive effect on total credit and are significant at 5% significant level. This implies that, ordinary savings and share capital have strong and positive effect on total credit. Also reserves have negative effect on total credit which his insignificant at 5% level of significance. This implies that reserves have a weak effect on total credit. The study concluded that, ordinary savings and share capital contribute greatly to capital accumulation of cooperative societies in Osun State which result in increased level of advancing credit for productive purposes. In view of this, cooperative societies should increase their share capital and also encourage members' ordinary savings to enhance their liquidity position. Lastly, cooperative societies should place less emphasis on cash reserves so that they will be able to generate enough returns on credits to members.